Predictions by Jon Markman, contributing editor to MSN Money…

“For investors, the new year will be defined by a titanic struggle between governments’ efforts to flood the world’s faltering financial system with cash and banks’ efforts to hoard it all for themselves.

Commercial banks are stashing instead of using the cash infusions because leveraged mortgage bets gone bad are shrinking their capital bases faster than central banks and foreign investors can refill them.

So what are the prospects for investors in this unhealthy environment? Here are the surprises that I see lying ahead:

1. Bank bankruptcy

Every financial crisis of the past 200 years has resulted in the bankruptcy, merging and closing of many banks. Sometimes even very large ones. This crisis will be no exception. Bankruptcy is an efficient means of clearing deadwood out of the forest, where it is purposelessly hogging resources, so that newer, stronger competitors can thrive.”

_____________

Jon Markman has been making predictions for some time. This one is pretty easy. If you read the rest of his 10 “gloomy” prognostications you’ll discover that banks and banking figure into most of them. America has lost sight of the essential truth that the Financial Founding Fathers relied on to assure the success of the fledgling economy of the United States in the late 1700′s and early 1800′s: the bank is the servant and you are the master. That relationship only works if you have money under your control.

Think about it. What bank that is  properly managed is willing to lend money to folks that don’t have any money to start with? It is the failure of banks to follow this prime rule that has led to the crisis that Jon Markman refers to. This failure will lead to a further tightening of credit requirements and only those who follow the practices outlined in Money for Life…in good times and bad will qualify for even the most basic credit opportunities – and they will be the ones with the least need. Politicians and pundits will not be able to solve this problem. It’s going to take a lot of individual Americans and their families to forsake the Debt Paradigm and build a solid foundation of money that they control to solve the problem.

Where are you in this equation? If you are not currently following a practice that lets YouBeTheBank – it’s time.

www.YouBeTheBank.com is not a sales site. It is designed to inform and educate. So also is the Money for Life book. Discover what it’s all about and how to get your copy at www.TheMoneyForLifeBook.com

Also read Why Be Your Own Bank…Revisited –>

Bookmark To: